Gov’t to blame for cedi fall – TUC

The Ghana Trades Union Congress says the Government is to blame for the fast depreciating value of the cedi.

It says while it blames dollarisation of the economy for the problem, the Government is the biggest culprit.

In a long statement issued by the Congress on Wednesday, the TUC said: “The TUC shares the view that the dollarization of the economy is partly to blame for the current messy situation. But Government itself is most guilty on this”.

It said: “We are in a country where custom duties charged by government are dollar-indexed. State agencies, like the Tema Development Corporation (TDC) sell land at dollar-indexed prices. The Ghana Institute of Management and Public Administration (GIMPA), along with other public educational institutions, have indexed their fees to the US Dollar. In such an environment, one can only expect rational economic actors to procure dollars ahead of time to shield themselves from exchange rate losses. Yet, Government turns round to blame innocent Ghanaians for dollarizing the economy”.

Besides its recent injection of US$20 million into the economy to shore up the cedi’s strength, the Central Bank also, on Tuesday announced a series of measures toward arresting the fast depreciating local currency.

The Bank warned in a statement that violation of any of the measures will attract punishment including pecuniary sanctions, jail terms, suspension and revocation of operating licences amongst others.

The statement issued on February 4, 2014, said the Bank has revised rules governing the operations of Foreign Exchange Accounts (FEA) and Foreign Currency Accounts (FCA) with effect from Wednesday February 5, 2014.

It has therefore ordered authorised dealers not to sell foreign exchange for the credit of FEA or FCA of their customers.

It also stated that cash withdrawals over the counter from FEA and FCA shall only be permitted for travel purposes outside Ghana and shall not exceed US$10,000.00 or its equivalent in convertible foreign currency, per person, per travel.

Also, no bank shall grant a foreign currency denominated loan or foreign currency linked facility to a customer who is not a foreign exchange earner. The Central Bank in a separate statement also said all exporters are required to collect and repatriate in full, the proceeds of their exports to their local banks within 60 days of shipment.

According to the TUC, “the US$20 million that the Bank of Ghana says it has injected into the economy is roughly equivalent to what one telecom company will have to transfer out of the country in a month”.

It added that: “With the value of the Cedi declining on a daily basis, the domestic prices of imports keep rising and this has adverse implications for the living conditions of workers whose salaries are fixed throughout the year”.

The statement signed by Secretary General Kofi Asamoah said: “…It is not just imported items that experience price increases. Landlords adjust their rents to be able to cope. Lorry fares continue their upward trend. In general, Ghanaians are facing difficult times as nearly all prices are going up.

Government functionaries are in A state of denial and are descending heavily and crudely on people who echo the general sentiments of Ghanaians. This may be understandable given that such functionaries live on state resources and they do not have to worry about soaring prices. But the truth of the matter is that the rest of Ghanaians are facing severe social and economic hardships. And it is important that Government and its functionaries wake up to the realities and do something about the plight of Ghanaians”.